'Pharma bro' Martin Shkreli arrested in FBI securities fraud sting
The pharma boss who became infamous after hiking the price of an HIV-related drug by 5,000 percent was arrested Thursday by the FBI, prosecutors said, accusing him of orchestrating a "trifecta of lies, deceit and greed."
The take down of Martin Shkreli
A hedge fund manager-turned-pharmaceutical company CEO comes amid an investigation related to "widespread" securities fraud through a hedge fund and drug company he once ran, according to a complaint filed by federal regulators.
Shkreli, 32, who was taken into custody at his midtown Manhattan residence, is currently the boss of Turing Pharmaceuticals and KaloBios Pharmaceuticals.
He was previously the manager of hedge fund MSMB Capital Management and chief executive of biopharmaceutical company Retrophin Inc.
Shkreli is named in a seven-count indictment in federal court in Brooklyn, New York, along with Evan Greebel, who was Retrophin's outside counsel.
At a news conference Thursday afternoon, U.S. Attorney Robert Capers in Brooklyn said Shkreli treated his companies as a "personal piggy bank" and ran them "like a Ponzi scheme."
Shkreli is being charged for illegally using Retrophin assets to pay off debts after MSMB lost millions of dollars.
The indictment said Shkreli and Greebel, along with others, orchestrated three interrelated fraud schemes from September 2009 through September 2014.
It said they fraudulently induced investors to invest in two separate funds and misappropriated the assets of publicaly traded Retrophine to satisfy Shkreli's personal and unrelated professional debt obligations.
Capers said Shkreli had a history of duping investors in one hedge fund to pay off debts from another, and instead of coming clean, continued with his scheme.
"He did that to conceal the lies he told, namely, that their investments were doing well and they were getting handsome returns," Capers added.
Shkreli is charged with securities fraud, securities fraud conspiracy and wire fraud conspiracy for orchestrating the three interrelated schemes.
Greebel, 42, is charged with wire fraud conspiracy for his role in the Retrophin scheme.
The pair, who could each face up to 20 years in prison, was set to be arraigned later Thursday.
